How Serious is this Bear ?

[Lewylewylewy]

A recession is a bear, but a bear is not necessarily a recession. This has implications for rebound ability.

1. What's interesting at the moment is that we have a number of companies doing very well, and some good companies faultering for various reasons. This is confusing investors about whether there are economy issues (everything is going great, but there's enough companies floundering to make you nervous).

2. We also have political concerns locally and in the USA. This is making doubts for the future and compounding concerns from point 1.

3. The are also economic problems in some countries, which don't seem to have any bearing on the world economy. Extra negative sentiment to compound concerns from point 2.

That said, we are not currently in a recession and although there are some concerning things going on, i can't see any evidence to suggest that the economy has been sufficiently dented to push us into a recession in the next year or two.

Therefore, i would say that this bear is just market sentiment (which has implications on my buying strategy). That said, it seems like a serious bear because it's triggered TA marks and the media reporting has changed tone (which i believe can cause self fulfilling prophecies), so it could hang around long enough for us to see the effect (if any) of point 2, before either getting much worse or triggering a bull.

Personally, I'm mostly cash except for my wbc stock that i timed poorly (that one im riding out). I'm avoiding high PE stocks because i see these as having lots of sentiment priced in. I will probably use this bear to trickle money back into stocks at a lower price, averaging my buy price over the period of the bear. The gambler in me will probably try to pick the bottom (which will be difficult due to my lack of experience of bears). I will certainly be looking out for bargains in my favorite stocks.

[Tomtom]

I tend to think in terms of long term trends and where we currently sit, Advisor Perspectives periodically publish updated charts with current trends:
Attachment 10220
Attachment 10221

[value_investor]

A lot of macro analysis and technical analysis coming out, I'm interested to see if earnings support this downturn..

If earnings are flat or even down on LY then we could see this go on for a while.

[Valuegrowth]

It is going to be either correction or bear market. Either way investors will get opportunity rebalance their portfolio or build a bullet proof portfolio. Heavy Asian market sell-off is overdone. Another option is take some action to hide out in badly beaten down strong balance sheet firms globally to ride out both bear and bull markets in the coming 3 to 10 years.

[skid]

Heres my guess.....the Fed will come out with some statement that it may not increase interest rates in 2019 quite as much as originally predicted if the economy cools......but anything to do with the president calming markets ...well...all bets are off....We are dealing with one expensive ego in that area.

[Beagle]

One expert commentator on CNBC explained the dichotomy in views between the Fed and the market extremely well the other day.
The Fed's mandate is to look solely at domestic US economic data. All reported historical domestic US economic date looks fine and very robust.
The market however is a forward looking animal and knows 45% of the S&P 500 earnings come from exports and is very concerned with the looming trade war and the already crystal clear slowdown in many of the overseas markets. Fed is looking at the historical aspects of apples and the market is looking at the future aspects of oranges. No wonder there's such a difference in their point of view.

[Raz]

One expert commentator on CNBC explained the dichotomy in views between the Fed and the market extremely well the other day.
The Fed's mandate is to look solely at domestic US economic data. All reported historical domestic US economic date looks fine and very robust.
The market however is a forward looking animal and knows 45% of the S&P 500 earnings come from exports and is very concerned with the looming trade war and the already crystal clear slowdown in many of the overseas markets. Fed is looking at the historical aspects of apples and the market is looking at the future aspects of oranges. No wonder there's such a difference in their point of view.

Seasons greeting to all...the market certainly has been a common topic of conversation with my friends here in NZ.

I think the the baby boomer demographic is starting to kick in, in mind set, more defensive positions all-round by the sector that holds the wealth.

Auckland and wider property price increases made it easy to make money until of late in NZ and that kills off risk taking and innovation. That has also occurred to a larger part in the US however their recent tax cuts have given a windfall to my cohort as well as allowed us to cash up businesses with a premium as well. Everyone I know has cashed up a large part of their portfolios and taken more defensive positions financially.

Here... where wealth is generally not as large as my US friends, everyone is stressing that their portfolio is now only 25% up rather than 40% overall. Why add the stress as you get older...so many people agonising over what they could have had...

2019 will be volatile overseas, its all set up to be nothing but and the question really is by how much...

[Balance]

Be very afraid when others are very greedy.

Be greedy when others are very fearful.

Always right to listen to the Oracle of Omaha but particularly when the commentary out there is pretty much all about fear.

https://www.businessinsider.com.au/w...8-12?r=US&IR=T

“During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well.”

In other words, don’t fall into widespread panic and begin selling off stocks, because wealth-generating investments are long term.

[Joshuatree]

Widespread euphoria atm DOW over 1,000 points up.